Welcome to Business Outlook
Related Articles
Deposits into shariah-based Islamic banks rose by 12 per cent to Tk 4.12 lakh crore at the end of June 2022 from 3.68 lakh crore at the same period last year.
It was the first time that the deposit of Islamic banks crossed Tk 4 lakh crore.
In terms of total deposits, however, the Islamic banks’ market share dropped to 26.19 per cent in April-June from 28.21 per cent in January-March period of 2022.
Out of a Tk 15,74,378-crore total deposit into the banking system at the end of June, the Islamic banks held Tk 4,12,341 crore, according to the Bangladesh Bank’s latest quarterly report.
Of the total Tk 4.12 lakh crore deposit of Islamic banks, demand deposit was Tk 52,493 crore and time deposit was Tk 3,59,848 crore.
At present, 10 full-fledged Islamic banks have been operating in the banking system. In addition, 45 Islamic banking branches of 9 conventional commercial banks and 480 Islamic banking windows of 13 conventional commercial banks are also providing Islamic financial services.
Deposits of 10 full-fledged Islamic banks stood at Tk 3,84,946 crore while branches of conventional banks held a deposit of Tk 13,199 crore and windows of conventional banks Tk 14,196 crore at the end of June 2022.
Among all Islamic banks, Islami Bank Bangladesh accounted for the highest 35.66 per cent share of total deposits which was followed by First Security Islami Bank with 11.79 per cent market share, EXIM Bank 10.16 per cent, Al-Arafah Islami Bank 9.75 per cent and Social Islami Bank 8.13 per cent, Shahjalal Islami Bank 5.58 per cent, Union Bank 5.01 per cent, Standard Bank 4.04 per cent, Islamic banking windows 3.44 per cent, Islamic banking branches 3.2 per cent, Global Islami Bank 2.94 per cent and ICB Islamic Bank 0.31 per cent.
In terms of lending known as investments in the Islamic banks, the market share of Shariah-compliant banks, however, increased to 28.52 per cent in April-June quarter from 27.78 per cent in January-March quarter of 2022.
All Islamic banks’ collective lending stood at Tk 3,81,829 crore against Tk 13,38,726 crore lending from the banking system by all scheduled banks.
The investment-deposit ratio stood at 0.93 which was 0.90 at the end of March 2022 and 0.89 at the end of June 2021.
Total remittances mobilised by the Islamic banking system stood at Tk 15,717 crore during April-June 2022, which was 21.57 per cent or Tk 4,323 crore lower than what was in the same period last year.
The total number of employment in the Islamic banking system was 48,728 at the end of June 2022 which was 47,927 at the end of March 2022 and 43,909 at the end of June 2021.
The amount of excess liquidity in the Islamic banking system reached Tk 26,009 crore at the end of June 2022 which went down by 28.48 per cent or Tk 10,355 crore compared with what was witnessed in the same period last year.
‘Although the Islamic banking activities are growing in Bangladesh, the number of rural branches of full-fledged Islamic banks is yet to keep pace with the demand. They should also focus more on expanding their outreach services for rural areas,’ the Bangladesh Bank mentioned in its report.
‘Islamic banks should invest more in socially beneficial industries, particularly in agriculture and small businesses. The investments made by the Islamic banks in ideal Islamic modes like Mudaraba and Musharaka are still at a minimal level (below 1 per cent of total investments).’
Given this, Islamic banks should pay more attention to develop proper guidelines and policies to promote investments under Mudaraba and Musharaka modes, suggested the report.
According to the central bank, the Islamic banks may explore new sectors like micro-finance projects, women financing, and investments in privatised projects and meeting financial needs for government agencies, which are not currently served by conventional banks – all these will give Islamic banks a great advantage to flourish.
It says that the Islamic banks have to adopt a customer- oriented strategy instead of product-oriented one because the current trends in bank marketing focuses essentially on the customers.
(NA)
